Google testing the waters in Cuba

A Google executive is headed to Cuba this weekend to explore bringing better Internet access to the island, and the search giant has made a related proposal to the Cuban government, according to a State Department official.

It’s the latest sign that U.S. tech companies are testing the seriousness of Cuba’s interest in opening up to outside investment after President Barack Obama’s announcement of a historic thaw in relations and the Raúl Castro-led government’s recent pledge to bring Internet access to all Cubans by 2020.

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The Google executive, Brett Perlmutter, is a New York-based member of the company’s Google Ideas unit aimed at helping to solve the world’s biggest tech problems. He’s taking part in a five-day trip to Havana with about a dozen other U.S. business representatives and “will focus on helping the Cuban government think through their publicly-stated goal of improving Internet access,” a company spokesperson said.

Google declined to say much else about its work in Cuba. But a senior State Department official, speaking on background, said the search giant has made a proposal to the Cuban government. “We don’t know what they’ve proposed, but we do know they’ve proposed something,” the official said.

In Cuba today, only about five percent of the population has Internet access, and cellphone service can be sloth-like where it’s available at all. Google is known for its experimentation with non-traditional ways of spreading the Internet, often routing around incumbent providers. Its Project Loon uses high-altitude balloons to carry access to hard-to-connect places, and Google Fiber has forged partnerships with U.S. cities to sell moderately-priced, ultra-high-speed broadband services.

Obama’s December actions loosened considerably the restrictions on the export of telecommunications equipment to Cuba. And trade analysts say that, while there was an initial period of confusion over precisely what the new rules would allow, tech companies like Google now feel on fairly firm legal footing.

According to the State Department, other network infrastructure companies have expressed interest in helping to upgrade island’s 2G wireless coverage.

The Cuba trip has been organized by the Council of the Americas, a 50-year-old trade group founded by David Rockefeller. The group will stay in Habana Vieja, Havana’s charming if crumbling historic section, and is scheduled to return Thursday. The visit coincides with the six-month anniversary of President Obama’s announcement of a thaw in relations with Cuba, including the loosening of sanctions that, said Obama, “have denied Cubans access to technology.”

Those who have paid close attention to Cuba since the thaw describe an exuberance over the quick flowering of technology tempered in short order by the realization that the island of 11 million lacks the networks, both land-based and wireless, needed to support modern devices. Without those networks, many technologies are little more than paperweights.

U.S. tech has generally thus far taken baby steps in Cuba, limited by the lack of Internet.

“Netflix made a big announcement that it is going into Cuba, but nobody can really can really access it,” says Kellie Meiman, managing parter at the international trade consultancy McLarty Associates. “Airbnb is a little more thoughtful about understanding what the needs on the ground are,” she said, because it’s established a Cuba service running atop an existing network of government-licensed rental rooms.

Perlmutter and others are on the trip are scheduled to attend a variety of meetings, including with officials from the Ministry of Foreign Affairs, local entrepreneurs, economists from the University of Havana’s Center for the Study of the Cuban Economy, and representatives of ETECSA, Cuba’s government-owned telecom. One goal is “to give these companies a nuanced perspective of what’s taking place on the island,” said Alana Tummino, director of policy at the Council of the Americas, who is leading the trip.

This won’t be the first trip by a Google executive to Cuba. Eric Schmidt, the company’s executive chairman, visited the island last summer. After that, Google began offering Cubans its lightweight Chrome Web browser.

Google Ideas, where Perlmutter works, is headed by Jared Cohen, a former State Department official who is co-author with Schimdt of the 2013 New York Times bestseller “The New Digital Age: Reshaping the Future of People, Nations and Business.”

There are smaller companies clamoring to engage in Cuba, too. The State Department official described a recent, well-attended meeting in northern Virginia where local executives asked eagerly about the new business landscape there. But the Cuban government, swamped with offers to talk and applications for visas to visit the island, appear to be prioritizing only the biggest fish.

“Cubans,” said the State Department official, “are thinking about large agreements: the AT&Ts, Verizons, and Googles of the world.”

The symbolism of helping to network Cuba, say those in the field, is enormous, even if the business opportunity is not. Cuba’s population is that of about Ohio, and the average salary is less than 30 dollars a month. But there’s status that comes with helping to connect a country that, despite sitting so close to the United States, has largely sat out the Internet era the U.S. has helped to lead.

“A lot of companies are very interested,” said Tummino. “It’s an intriguing market because it’s a virgin one for growing IT and telecom infrastructure.”

But there are also risks. Some companies worry that working with the Castro-led government, a necessity when doing business in today’s Cuba, is still potentially toxic.

“Everyone’s really nervous that they’re going to get protested in Miami,” said Jake Colvin, vice president for global trade issues at the the National Foreign Trade Council. That organization is leading its own trade trip to Havana later this month, one that will include representatives of companies specializing in “Internet or hardware,” he said.

“A lot of companies,” said Colvin, “are just starting to do their due diligence.”

That includes figuring how out serious the Cuban government is about opening up access to a free and open Internet anytime soon.

“People had high expectations that it was going to move very fast,” says Jose Luis Martinez of the Miami-based Foundation for Human Rights in Cuba, which runs a project called Connect Cuba. “But the reality is that this is going to be a long, drawn-out process, it isn’t going to happen overnight, and it’s going to be on the Cuban government’s terms.”

The State Department official said one stumbling block had been the country’s inclusion on a list of state sponsors of terrorism, a designation lifted in May. Generally, though, Cuban government officials seem receptive to the notion that it isn’t in the best interest of Cuba, or Cubans, to keep the island cut off from the rest of the networked world.

“It’s completely professional,” the official said of meetings with Cuban counterparts to discuss bringing the country online. “We have a different idea about the role of government and of markets, but it’s cordial.”